Harry S. Schwartz the golfer and Harry Schwartz the economist are two entirely different persons.
Schwartz the golfer tends to stray from right to left of the fairway and then, according to some friends, be unable to count higher than six in toting up his shots on an individual hole. But the Schwartz who is retiring as the chief economist of the Federal National Mortgage Association is regarded as a middle-roader who will not budge from his belief that the United States need to rethink "our priorities" and do a better job in fighting inflation and trade deficits.
And just before leaving his FNMA post the other day to begin a new career as an economic adviser from a downtown office, Schwartz added: "The amount of our tax revenues going into public programs needs rethinking."
What about Fannie Mae, the agency that has been criticized for not being sufficiently attuned to needs of low-in-come people? "The FNMA role is to be there when it's needed and to be able to buy mortgage loans when the market needs those purchases to make more funds available for new mortgages," Schwartz said. "Through the first seven months of this year FNMA purchased $7 billion worth of loans, as much as in all of 1974, the biggest previous year as a buyer."
In response to whose needs are served, Schwartz insisted that the loans bought by FNMA average less than those made by savings and loan institutioner in the private mortgage market. On mortgage interest rates, Schwartz said that he had looked for a decline in lending rates from the current high, level of 9 1/2 percent for FHAVA loans and 10 percent and more for conventional loans. "But the market has taken some new turns lately. We'll have to wait and see."
While the savings and loan industry now is pushing to get federal approval for variable rate and rollover rate mortgages to avoid being boxed into long-time commitments at fixed interest rates, Schwartz took exception. "I'm simply not impressed by the arguments for a mortgage interest rate that would change with the market nor one that would be renegotiated every five years," he said.
Nor does Schwartz favor the "reverse mortgage," which would enable older persons and couple to obtain monthly checks for living expenses by building up a new mortgage on a debtfree house. "Too many young persons are buying more house than they really need now and the reverse mortgage would encourage more older people to stay in houses larger than they need," he said.
A native of Philadelphia who now lives with his wife in a 2,400-square-foot house in Bethesda, Schwartz got his bachelor's degree in economics from the University of Pennsylvania.
A sober man as well as a self-confessed pragmatist, Schwartz puffs persistently on his pipe and maintains that the supply of mortgage money for home loans depends primarily on personal savings, "the backbone of the mortgage market." He says that funds shifting in and out of thrift institutions cause problems for home buyers and builders and tend to make borowing rates more expensive.
Before going into FNMA retirement, Schwartz and wife Cynthia toured Europe. He admittedly enjoyed it. But he does seems glad to be back.